Why Australians don't feel very charitable

With wealth comes social responsibility. Australians do not seem to grasp this, writes Gregory Hywood.

Australians just won't give. In a country that must come close to being a middle-class paradise, those who have done well are notoriously parsimonious.

Fund-raising makes up a mere 0.5 per cent of our national economy. In the US it is well over 2 per cent and in Britain 1 per cent.

It had better change. Otherwise, as Peter Costello aptly warned last week, the social fabric will fray as our self-absorption rises and community engagement declines.

The underlying theme of Costello's comments was stark. Governments must grapple with increasing financial demands and have no desire to raise taxes. If the community wants more spending on arts, culture, education and other areas of social benefit, individuals and the commercial world had better rise to the task.

This should come as no surprise. When Australia entered into a generational economic upheaval beginning with the floating of the dollar in 1983 it made an entirely rational choice. Not to free an economy bound up in postwar regulation would have seen Australia slide into poverty and disrepair.");document.write("

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But as government moved from its regulatory role, the private sector has not responded by taking on some of the social obligations being abrogated. It was happy to make the money, but shunned responsibility.

Much of the regulatory framework discarded by government was built around delivering the type of equity in income distribution that underpinned the nation's social cohesion - the "fair go" we still regard as a core value.

The arbitration commission was defanged. The tariff wall was pulled down. The aged pension system was partially dismantled in favour of contributory superannuation.

To free the economy to more efficiently create wealth, there was bipartisan acceptance of a shift in responsibility to individuals.

Some on the Labor side may dispute this. But the political fact remains that it is beyond the capacity of any government to effect economic transfers that would come even close to matching the redistributive effect of a national wage system and a massive tariff regime.

In any case the benefits have been considerable. A more efficient economy uses its resources better, creating more jobs and higher incomes.

But there is always a downside. The benefits have been more tightly concentrated than Australians have been used to.

The rich have become richer as they untapped the benefits of virtually unlimited credit. BRW magazine has reported the number of millionaires trebled over the 1990s. Their share of national wealth rose from just over 10 per cent to nearly 25 per cent.

Resentments build and social cohesion is frayed.

We see economic security issues flow over into anti-immigration and asylum seeker sentiment. Racially tinged wedge politics has entered our national debate. As the Treasurer conceded last week, "tolerance" has become a dirty word in some quarters. And it won't necessarily get better.

Emerging defence and baby boomer welfare needs and a squeezed revenue base will limit future government discretionary spending aimed at rounding the edges of that resentment.

But there is little sign the "new rich" have any understanding of the mutual obligation that comes with this wealth.

According to data compiled by the Comparative Nonprofit Sector Project at Johns Hopkins University in Baltimore, in the US 50 per cent of funds flowing into non-profit cultural and recreation organisations comes from philanthropy. In Australia it is 4 per cent. Australian non-profit volunteer levels are barely half the norm in other developed nations.

To put it into perspective: if we lifted our rate of philanthropy to just the British level - 1 per cent of gross domestic product - it would deliver another $3.5 billion to charitable institutions.

So why are Australians so mean? The obvious reason is that we have long seen it as the government's job. But it's barely an excuse. Americans pay taxes too. They give because it is a cultural imperative - a personal responsibility that comes with material success.

Or we leave it to the very wealthy - the Pratts, Smorgons, Lowys, Packers, Murdochs and Myers. But as Frank Lowy said recently, anyone can be a philanthropist, all it takes is "a big heart". Only the dollar value varies.

In our old regulated world where government did deliver equity, our attitude may have been justified. No longer. For sound reasons we chose to embrace a more rational, American-style economic model. It's beyond time to make good on the other side of the deal.

Quite obviously there are lessons from the US experience. There is a strong contrast between American corporate leadership on the issue and the prevailing (although not absolute) notion in Australian public companies that giving is only an individual responsibility.

Go to any American business conference and speakers are introduced by their corporate title and their charitable responsibility. Take a corporate job in the US and you are expected to take on a charity role of equivalent seniority. The flow-on benefits for the company in terms of community standing are obvious.

On an individual basis it is quite common for a middle-class American family to have two or three designated charities to which they give anything between 1 and 5 per cent of their income.

This level of commitment to the broader community is integral to how a nation as large and diverse and as focused on individual success as the US can find common cause.

As Australia follows a similar course we need to find our own way forward in this new world of mutual responsibility. Soon.